If Average Nominal Income Was About $15,000 and the Price

question 156

Multiple Choice

If average nominal income was about $15,000 and the price level index was 118, then average real income would be about:

• A)$11,146
• B)$12,712
• C)$13,385
• D)$14,249

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Definitions:

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future.

Depreciation Expense

The allocated cost of an asset over its useful life, representing wear and tear, decay, or decline in value.

Note Receivable

A financial asset representing a written promise to receive a certain amount of money at a future date.

Interest Earned

The amount of income earned from depositing funds or investing in interest-bearing financial instruments.